ACCT 220 ACCT220 Quiz 1 Answers (UMUC)

ACCT 220 ACCT220 Quiz 1 Answers (UMUC)

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  1. Generally Accepted Accounting Principles (GAAP) allow companies to issue financial statements, using either the cash basis or the accrual basis of accounting, depending on their needs.
  2. Adjusting entries are done to make sure that expenses and revenues are recorded in the proper accounting period.
  3. A compound journal entry can never affect more than two accounts.
  4. The current ratio is cash divided by current liabilities.
  5. Materiality is subjective. One company may consider $1,000 material and another company may not.
  6. Revenues are recorded when _______________.
  7. Which of the following is NOT a liability?
  8. Management failing to reveal a default on a loan agreement will have violated what principle?
  9. Expenses are recorded in the same period that related revenue is recorded, according to the _______________.
  10. Accumulated depreciation is _______________.
  11. An asset cost $14,400 and is expected to last 8 years, at which time it will be sold for a scrap value of $2,400. Using straight-line depreciation, the monthly depreciation journal entry would be _______________.
  12. When money is collected from a customer previously billed, we _______________.
  13. Which event will have the effect of increasing retained earnings?
  14. The income summary account is used to _______________.
  15. The dividends payable account belongs on which statement?

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